KARACHI: With the aim to overcome missed revenue collection targets, the Federal Board of Revenue has decided to audit insurance companies to check withholding tax deduction on premiums paid by non-filers.
According to the official sources, the Large Taxpayers Unit (LTU) Karachi could manage to collect only Rs30 to 40 million from the insurance firms in the first four months of the current fiscal year as the revenue authority had set target of Rs1.2 billion under withholding tax collection for the fiscal year 2016-17.
Sources said the teams had already been constituted to start physical examination from November 9. “The officials will inspect the accuracy and reliability of deduction by insurance companies,” they added.
The government, through the Finance Act, 2016, inserted a new provision (Section 236U) into Income Tax Ordinance, 2001 under which every insurance company is required to collect adjustable advance tax at the time of collection of premium from non-filers holding life or general insurance policies.
